In a statement, the Indian High Commission in Colombo said that India has a longstanding indigenous missile development programme, which is defensive in nature and not directed against any country.
"Speculation on such sensitive issues in a manner calculated to mislead, is out of tune with the spirit of the friendly and close relations India and Sri Lanka enjoy, including in the fields of defence and security," it said.
The statement, which dismissed these reports as "completely baseless and fabricated", came as Sri Lankan President Mahinda Rajapaksa expressed his satisfaction over his personal meeting with Prime Minister Manmohan Singh in New Delhi last week.
"The visit was successful. It helped in further strengthening of our long and historical relations with India as our closest neighbour," Rajapaksa said during his monthly interaction with media.
Rajapaksa visited Madhya Pradesh on September 19 to lay the foundation stone for a Buddhist University in Sanchi and met Dr Singh in Delhi.
His visit to India came against the backdrop of attacks on Sri Lankan pilgrims in Tamil Nadu, forcing the government here to issue a travel advisory warning against travel to the Indian state.
Rajapaksa's secretary Lalith Weeratunga, who was with the President at the media interaction, said Sri Lanka was keeping a tab on the latest developments.Action would be taken to review the advisory depending on the developments, Weeratunga said.